Why Firms Fail to Sustain? Evidence from Dow Jones Index

Abstract

This study, focusing on the longevity of large business organizations as a period of uninterrupted satisfactory financial market performance, has examined companies failing to demonstrate longevity, such as by being removed from the Dow Jones Industrial Average index. The present research has performed groupand case-level longitudinal analyses of financial performance indicators.Afterwards, the qualitative longitudinal analyses were conducted based on primary qualitative data of sampled US organizations listed on the Dow Jones Industrial Average index across 28 years (1986-2013). This study has found that, from a longitudinal perspective, negative inflection points of concerted declines in the frequency with which different longevity factors are mentioned are highly likely to be among the anticipatory indicators for the financial events of removal of the corresponding companies from the Dow Jones index. In other words, this study indicates that organizational longevity is closely related to the dynamics of company-level financial and managerial performance.